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 |  Subject: ADVFN Morning Euro Markets Bulletin - August 2nd 2010  Mon Aug 02, 2010 10:05 am | |
| By ADVFN.comADVFN offer FREE streaming stocks and shares data form around the world. SEE | London Markets Report : |
Strong start for Footsie
Market Movers
FTSE 100 5,336.94 +1.50%
techMARK 1,648.35 +0.76%
FTSE 250 10,089.89 +1.42%
Banks and miners are in favour this morning, helping to Footsie make a bright start. The banks’ interim results season kicks off later today with HSBC’s first half figures and predictions at the weekend were for strong numbers across the sector. Lloyds, Barclays and Royal Bank of Scotland are all higher today.
Miners are also going well led by silver miner Fresnillo, Kazakhmys and Antofagasta.
Randgold Resources revised production guidance for its Loulo gold mine in Mali downwards following what it called a ‘difficult quarter.’ The miner said processing throughput was affected by a series of power outages that exacerbated the impact of downtime resulting from the bedding down of the Loulo plant expansion project.
Intertek, the provider of quality checking and safety services, upped its full-year revenue forecasts as it reported a 3.3% rise in half year profits. The group now expects to achieve 2010 organic revenue growth of mid single digits with a broadly similar margin compared to 2009, and as markets recover further it anticipates to return to high single digit organic growth rates.
Property group Hammerson reported a 7% rise in half year profit as its markets continued to recover from the recession over the first half of 2010, but cautioned that the outlook remains uncertain.
British Land and Blackstone Group have signed leases with Swiss bank UBS to develop a new 700,000 sq ft building on the site of 4 and 6 Broadgate, in the City of London.
Engineering contractor WS Atkins is buying Florida-based professional services firm PBSJ Corporation for $280m (£178m) in cash following a first quarter that went as planned. Trading in the first quarter is reported to have been in line with expectations.
Business process outsourcing specialist Xchanging warned that revenue growth for the full year will be slightly lower than previously anticipated. “Our customers remain cautious and we have seen further slippage in time scales for closing deals in the second half of the year. Therefore, the completion of further large new deals in 2010 will be challenging,” said the group.
The raid on staff at Tullett Prebon by rival BGC in the second half of last year cost the inter-dealer broker 7% in revenue during the six months to June, but it still expects a “good” outcome for the year.
First half revenue of £475.8m was down 8% from £517.9m a year ago as the broker defections in North America caused a 30% slump in fixed income revenue to £132.7m.
Senior, the manufacturer of high technology components and systems, said 2010 adjusted pre-tax profit are anticipated to be comfortably ahead of market expectations. In the first half, adjusted pre-tax profit rose to £32.5m compared with £23.5m last year, while revenue was slightly higher at £287.7m from £275.9m last time. |
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| | UK Event Calendar for today | INTERIMS
Arena Leisure, Elementis, Fidessa, Hammerson, HSBC Holdings, Intertek Group, Keller Group, Management Consulting Group, Senior, Telecity Group, Tullett Prebon, Ultra Electronics Holdings, Xchanging, XP Power
INTERIM DIVIDEND PAYMENT DATE
Compass Group
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Construction Spending (US) (15:00)
ISM Manufacturing (US) (15:00)
ISM Prices Paid (US) (15:00)
PMI Manufacturing(EU) (09:00)
PMI Manufacturing(GER) (08:55)
GMS
Healthcare Locums
FINALS
Filtronic
IMSS
Diploma
EGMS
Ludgate Environmental Fund, LXB Retail Properties, Sistema GDR (Reg S)
UK ECONOMIC ANNOUNCEMENTS
PMI Manufacturing (09:30)
FINAL DIVIDEND PAYMENT DATE
Chloride Group, Hogg Robinson, JD Sports Fashion, United Utilities Group
Q1
Gail (India) GDR (Reg S) |
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| | Forex Markets Reports |
US dollar remains pressured by recovery fears
The US dollar index closed lower for the 8th week in succession as doubts about the US recovery continued to weigh on the greenback, along with concerns about further monetary stimulus in the face of continued economic weakness. Better economic data out of Europe and more specifically Germany has also boosted the single currency at the dollar s expense.
Friday’s disappointing US GDP figures reinforced this perception of weak recovery coming in at 2.4%, against an expectation of 2.6% and seemed to reinforce St. Louis Fed President Bullard’s fears, expressed at the end of last week, that further monetary stimulus might be necessary to prevent deflation and increases in unemployment.
Further stimulus will also raise additional concerns about the size of the US budget deficit especially so soon after Moody’s lead sovereign analyst suggested that the US needs to articulate a credible plan to tackle its huge budget deficit, or face the threat of losing its triple AAA rating in the coming years.
To this end investors remain uncertain in the face of the conflicting signals being given by company earnings and recent US economic data. Sunday’s Chinese PMI data hasn’t helped that perception of investor unease as it fell to 51.2 in June its lowest rate in 17 months. The HSBC equivalent of the same measure slid below 50 for the first time in 16 months to 49.4. Readings below 50 suggest economic contraction.
The pound continues to remain strong against both the dollar and the Euro on the back of the mixed messages coming from the Bank of England regarding inflation and possible rate adjustments. This week’s rate meeting will not change anything with respect to monetary policy but the discussions could be quite interesting given the recent better economic data. Today we have manufacturing PMI for July which is expected to come in around 57.
In the US ISM manufacturing data for July is expected to come in around the same level around 56.2 and the prices paid component will bear particular attention given the recent concern about deflationary pressures. Expectation there is for a reading of 57.
EURUSD – last week’s rally towards 1.3105/10 stopped just short of the 1.3125 38.2% Fibonacci level. This remains the key target while above the 1.2950 area. A close above 1.3125 would target the 1.3500 area which is the 50% retracement level of the 1.5145/1.1880 down move. On the other hand a break of 1.2950 would open a test towards the 1.2840/50 level. A break below last Friday’s lows around 1.2840/50 re-targets the 1.2730/40 area.
GBPUSD – the pound continues to make new highs as it looks to push towards 1.5870 the 61.8% retracement level of the down move from 1.6880 to the May lows at 1.4230. The cable needs to hold above the 1.5520/50 support area and 50% level in the near term to prevent a deeper downward correction towards the 1.5330/40 area, but with momentum starting to become a little stretched there is a possibility we could see some sharp pullbacks in the interim.
Long term trend line support levels, remain around the 1.5280/90 area, from the June lows at 1.4350.
EURGBP – pretty much as you were on the euro here, stuck in a range between the pivotal resistance at 0.8400/10 area and the support around the 0.8320 area. There does however appear to be a head and shoulders top building up here over the last 2 weeks with a horizontal neckline at 0.8315 which could produce a significant down move. Only a break back above the 0.8400/10 level diminishes the risk of a downside correction. A break and close below the 0.8315 neckline targets 0.8240, and then 0.8100, while 0.8410 caps.
USDJPY – last week’s failure to overcome the 88.00/10 level keeps the focus solidly on further yen gains in the short-term and also keeps up the pressure on the Bank of Japan with respect to monetary policy. A close above here, unlikely at the moment, would signal dollar gains back towards 89.20/30. The objective remains towards last year’s yen highs at 84.80 after last weeks new low at 85.95. A break of 84.80 would look to target the 1995 lows below 80.00. |
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| | US Markets Report |
Dow rallies after disappointing data
US stocks recovered early losses after disappointing US economic data. Dow Jones closed down one point at 10,465, the S&P 500 was unchanged at 1,101 and Nasdaq added 3 to 2,254. Over July, the Dow and S&P 500 both gained about 7%.
Gross domestic product (GDP) data rose at an annualised rate of 2.4% in the second quarter, a significant slow-down from the 3.7% annualised gain in the first quarter. Meanwhile, US consumer sentiment tumbled in July to its lowest level since November 2009.
Corporate news flow failed to engender much enthusiasm. Oil giant Chevron’s second quarter earnings more than tripled but the shares fell back as revenues came in below analysts’ estimates.
Drug company Merck was another casualty as second quarter earnings more than halved, due to acquisition and other exceptional charges. The company also trimmed the upper end of the guidance range for full year sales.
A lack of available solar modules hit First Solar’s second quarter sales. The company kept modules for its own projects.
There was a more positive response to security software supplier McAfee’s better than expected second quarter profit and acquisition of Tencube, a provider of the WaveSecure mobile security service.
Theme park operator and film studio Walt Disney wilted after announcing it will sell Miramax Films to a consortium of investors for more than $660m after a six-month search to find a buyer.
"Our current strategy for the Walt Disney Studios is to focus on the development of great motion pictures under the Disney, Pixar and Marvel brands," said Disney chief executive Robert Iger.
Mortgage guarantor and life insurer Genworth Financial is being subpoenaed by New York Attorney General Andrew Cuomo as part of the state’s life-insurance fraud probe.
Dow Jones I.A - Risers
Home Depot Inc. (HD) $28.51 +1.64%
Boeing Co. (BA) $68.14 +1.37%
Alcoa Inc. (AA) $11.17 +1.36%
Verizon Communications Inc. (VZ) $29.06 +0.62%
McDonald's Corp. (MCD) $69.73 +0.50%
Caterpillar Inc. (CAT) $69.75 +0.50%
Dow Jones I.A - Fallers
Intel Corp. (INTC) $20.61 -2.00%
Merck & Co. Inc. (MRK) $34.46 -1.71%
Exxon Mobil Corp. (XOM) $59.68 -1.09%
Microsoft Corp. (MSFT) $25.75 -1.08%
3M Co. (MMM) $85.54 -0.93%
Procter & Gamble Co. (PG) $61.16 -0.83% |
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| | Monday newspaper round-up: Banks, BP, British Land |
The new chairman of the powerful Commons Treasury Select Committee has stepped into the escalating row over loans to small business, telling ministers to stop threatening the banks.
Andrew Tyrie, the Conservative MP for Chichester, issued the warning as the high street banks braced themselves for fresh criticism in a week when they will reveal half-year profits of £10bn. George Osborne tore into the sector at the weekend, saying that he would not tolerate banks that unnecessarily put pressure on small and medium enterprises and demanding that they lend more, the Times reports.
BP will this week step up its fight against an "unconstitutional" proposal to ban it from new US offshore drilling, which the British Embassy has warned could be seen as protectionism. US lawmakers have been working for more than a month on new legislation to stop any company from winning offshore oil licences if it has contributed to the deaths of more than 10 workers in the last seven years. The proposal cleared another hurdle by passing through the House of Representatives late on Friday night, but it still has some way to go before becoming law, the Telegraph reports.
Plans by BP to start drilling for oil and gas off Libya within weeks have prompted growing calls for a moratorium on deepwater operations while Mediterranean states assess the environmental impact in light of the Gulf of Mexico disaster. Stefania Prestigiacomo, Italy’s environment minister, has become the first senior official within the European Union to suggest that a moratorium might be appropriate while the Mediterranean’s 21 littoral states find a “common voice,” the FT reports.
The City of London’s largest office building is to house the new European headquarters of UBS after the investment bank agreed a deal with British Land and Blackstone to remain on the Broadgate estate. UBS has finalised a deal with the owners of the 1980s financial complex in the City of London that will be announced on Monday, the FT reports.
Fears of a "double-dip" global recession are gaining ground as Chinese manufacturing growth cools. Hot on the heels of last week's disappointing US GDP figures China's Federation of Logistics and Purchasing yesterday published data indicating that manufacturing growth slowed to a 17-month low in the aftermath of a government clampdown on property speculation and polluting factories, the Independent reports.
Alan Greenspan, former chairman of the US Federal Reserve, has added his weight to warnings that the US economy may be heading for a double-dip recession. Amid worries about a slowdown in economic recovery, Greenspan said: "We're in a pause in a recovery, a modest recovery but a pause in the modest recovery feels like a quasi-recession," the Telegraph reports.
One of the most highly regarded fund managers in the City has committed $25m (£16m) of clients’ money to investments in Zimbabwe. Neil Woodford, who manages about £15bn for Invesco Perpetual, has bought a stake of 29.5% in Masawara, a company that will be valued at $80m when trading in the shares begins on London’s Alternative Investment Market in a fortnight, the Times reports.
More than one million BlackBerry users face being cut off from key services in Saudi Arabia and the United Arab Emirates, which claimed yesterday that the mobile devices posed a threat to national security. The two Gulf states are concerned that encrypted messages to and from BlackBerry handsets could be used by criminals and terrorist groups, the Times reports.
One of the biggest owners of consumer brands has launched a business game on Facebook to overcome its relative anonymity among the public. Reckitt Benckiser, whose brands include Nurofen and Cillit Bang, hopes that the game Powerbrands will educate players on the company and its culture and help to attract the brightest graduates, the Times reports.
Rolls-Royce has become one of the first companies to produce an audit of how its activities add value to the UK economy, in findings that will add impetus to the debate about the wider impact of high-value manufacturing and engineering. An analysis by the Oxford Economics consultancy found that output linked to activities by the aero-engine company last year added up to 0.56% of UK GDP – a huge amount given that its workforce accounts for only about one in 3,000 of the UK population, the FT reports.
Manufacturing output will grow three times faster than the wider economy this year, but companies and consumers face the risk of being squeezed by rising prices until 2012, according to a report out today. Manufacturing output is set to grow by 3.8% this year and 3.4% next year, according to the EEF, as the weak pound and a continued rise in demand from emerging markets encourages activity, the Times reports.
Employers' demand for new staff slipped back by one point in July, while salaries for recruits remained flat, the recruitment giant Reed will say today. According to the monthly Jobs Index produced by the group's reed.co.uk website, Britain's pay cheques remain 5% down, although the last three months' stability points to a gradually improving climate, the Independent reports. |
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